Text messages turn 20 today and their use may rise 40 percent by 2016, even as mobile-phone owners increasingly rely on Facebook Inc. (FB) and WhatsApp to communicate.
The first SMS, or short message service, text was sent over Vodafone Group Plc (VOD)'s network on Dec. 3, 1992 with the message "Merry Christmas." By 2016, users may send 9.4 trillion texts, generating $127 billion in revenue, up from 6.7 trillion forecast for this year, according to researcher Informa Plc.
SMS became a key source of income for carriers worldwide, initially costing users a few cents per text and eventually becoming wrapped into unlimited voice and data plans. As more customers have switched to smartphones, with better access to the Internet and more applications, people are increasingly using chat features on Facebook and other websites.
"The concern for mobile operators is that the malaise that SMS faces in countries such as the Netherlands, Spain, China, South Korea and the Philippines, where SMS traffic and revenues are in decline, will inevitably spread, as the penetration of smartphones and mobile broadband grows," Informa said in a note.
Growth will come via emerging markets in Africa, Asia and Latin America where fewer users have smartphones and they rely on SMS for communication as well as services such as mobile banking, Informa said.